The Solution to the F.C.C.’s Net-Neutrality Problems

Tom Wheeler, the chairman of the Federal Communications Commission, probably hoped he could avoid spending too much of his tenure dealing with net neutrality. He likely envisioned spending a few pleasant years in office, liberating some spectrum (he’s already done some of that), and maybe playing with a few mergers. But, like an American President hoping to stay away from the Middle East, things haven’t quite worked out that way.

The troubles began in January. The F.C.C. has two ways of regulating Internet openness: through its main authority (called, in telecom jargon, Title II) and through auxiliary rules. Wheeler’s predecessor, Julius Genachowski, had tried to defend net neutrality with the auxiliary rules—like the commander of a battleship foreswearing his sixteen-inch guns and relying instead on fire hoses. Not surprisingly, early this year, the Court of Appeals for the District of Columbia struck down Genachowski’s rules.

Wheeler, unshaken, came up with an action plan consistent with his get-things-done mentality. Picking up on the scraps of authority recognized by the court’s decision, he decided to propose a new net-neutrality rule to fill the vacuum, get it enacted by the end of the year, and return to other, more pleasant pursuits.

Things did not go as planned. The problem is that Wheeler’s new version of the net-neutrality rule is notably weaker than previous versions. Like his predecessor, he pulled out the fire hoses, relying on something called “706” authority. His lawyers wrote a cautious rule that permits “commercially reasonable” but discriminatory deals by carriers (the language is imported from a standard the F.C.C. uses for wireless roaming agreements). When that proposal leaked, the chairman and his staff soon found that they’d stepped barefoot onto the third rail of online politics. The Internet has been sizzling ever since.

The problem is that the words “commercially reasonable,” on their face, imply slow-lane and fast-lane deals, whereby carriers like AT&T and Comcast would favor the strong and hurt the weak, while enriching themselves in the process. They could charge some companies extra for their content to reach you; everyone else’s content would then slow down. If the Internet can be said to have a street, it erupted—with tens of thousands of angry e-mails, phone calls, Reddit rants, investigations by young reporters at Vice and The Verge, and the Internet’s forte, amusing online videos. Yesterday, more than a hundred Internet companies, from smaller tech firms like Etsy and Tumblr up to older authorities like Google, Microsoft, and eBay, wrote the Commission to signal their dissatisfaction with the proposal. With the storm raging, even party discipline has broken down: Wheeler may not have the votes to pass his plan as he’d hoped, as both Republican and Democratic commissioners have signalled that they want the chairman to slow down.

So what should Wheeler do? He can stick with his original plan, try to pass the basic “commercially reasonable” proposal, and face a revolt from his commissioners, continued outrage on the Internet, and the wrath of the Internet industry. He could well end up being known widely (even if unfairly) as the telecom lobbyist who broke Obama’s promises and killed the open Internet, which is rather an unpleasant thing to count as your legacy, and which is what everyone is calling him today. The alternative is to toughen up the rules. Wheeler had repeatedly said that he believes in the open Internet; he could clarify his rule and say that it presumptively bars most forms of discrimination and forbids blocking traffic from some content providers. Something like that would likely satisfy much of the opposition, but it would come with its own political challenges. It might be vulnerable to another court challenge, and Wheeler may need to invoke the F.C.C.’s full authority (Title II—the sixteen-inch guns), yielding a political backlash from the other side.

Wheeler is in a bind. But here’s a solution. The chairman should, as just suggested, toughen up his proposal to presumptively outlaw fast lanes and degradation schemes. Then he should specify, as a legal matter, that his rules rely on 706 authority primarily, but are also backed up by the full force of the Commission’s authority, should 706 authority fail. Wheeler has already said that Title II authority is “on the table,” but he should make this explicit by doing what Congress does routinely, which is pass laws under more than one basis of authority, to best insure the law’s survival (lawyers call this arguing in the alternative). Interestingly, for reasons I’ll describe, this proposal may actually reduce the odds that the telecom industry challenges the rules in court.

To make sense of this, one needs to understand just what this “Title II” is and why the Commission has been nervous to invoke it. Part of the Communications Act of 1934, it is the F.C.C.’s main source of authority over wire communications, and it gives the Commission the power to regulate anyone who offers a “telecommunications service,” which is defined as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” On such services, the F.C.C. is empowered to ban both “unjust” and “unreasonable” discrimination.

The services offered by an Internet-access provider fit easily under the authority of Title II, which is why, in the nineteen-nineties, they were originally so classified, and remained so until the early two-thousands. You pay your provider to deliver the information you seek, unchanged; Verizon’s job is to get you Wikipedia entries, not to edit them. And net-neutrality rules, just like Title II, ban unjust and unreasonable discrimination. Moreover, the Commission is allowed to forebear, or not enforce, any part of Title II it might consider too onerous. It is, in short, the obvious basis of authority for a net-neutrality rule.

The problem with Title II isn’t legal but political. For more than a decade, the telephone and cable companies have been trying to nullify Title II, not by amendment but by stigma. With some success, they have tried, within the context of Beltway conversation, to establish the idea that anyone invoking Title II authority is a raving heretic who probably ought to be burned at the stake, or at least think twice if they want to get a decent job anywhere. In 2010, the last time the F.C.C. considered using Title II, the Fox News host Glenn Beck described it as a “Marxist” plot, and AT&T labelled defenders of the approach religious extremists. Telecom lobbyists didn’t invent this repeal-by-stigma strategy, but they have shown themselves to be skilled practitioners of the art. Consequently, it has been a decade since the Commission has used its main authority, and, rather like the battleship crew that doesn’t use their main guns, they are hoping they get too rusty to use.

In an extension of that approach, some have suggested that invoking Title II would be legally complex and risky, which is quite untrue. The professors Kevin Werbach and Phil Weiser, for example, argue that moving to Title II will result in the “FCC’s work grind[ing] to a halt in a miasma of political and legal opposition.” The political opposition I grant, but the legal challenges are overrated. As both authors know well, Title II was used, in the late nineteen-nineties, to regulate both wireless and broadband carriers. That means the Commission is returning to a previous approach, as opposed to breaking new ground.

Nonetheless, if we take political opposition as a given, the Commission’s best course is to pass tough rules under 706 with Title II as the backup, to insure the rules survive a court challenge. This strategy may actually ward off court challenges, given that it presents the carriers with a kind of trip wire. Attempting to invalidate the rules with lawsuits could well reactivate the full authority of the Commission over broadband, with the carriers unable to blame anyone but themselves.

If all goes according to plan, the anger will subside, the sun will come out from behind the clouds, and the chairman and his staff can spend the rest of their years relaxing, maybe auctioning off some spectrum, and working on a pet project that insiders call the “I.P. transition.” Wheeler himself, meanwhile, can sit back and bask in being the man who proved his detractors wrong and saved the Internet.